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El Clasico in Miami: A Savvy Business Strategy by the International Champions Cup

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The International Champions Cup (ICC) is an annual exhibition club competition featuring teams from Europe playing pre-season friendly matches. The tournament began in the United States five years ago but has since expanded to include numerous countries around the globe including China and Singapore.

Each year the tournament has grown in popularity and it continues to establish itself as the most important summer competition featuring top clubs such as Real Madrid, FC Barcelona, Manchester United, Manchester City, Juventus among other European giants.

The most anticipated match in the competition this summer will be “El Clasico” held in Miami’s Hard Rock Stadium. FC Barcelona and Real Madrid will play for only the second time in their history outside of Spain and the match promises to be an important revenue generator for the organizers.

A Ticketing Revenue Goldmine

It is estimated that the International Champions Cup generates over half of its revenue from ticket sales alone.

This is due to the high demand in these markets to have the opportunity to see the world’s best teams and players compete on their home soil. Despite being a summer exhibition tournament, participating teams are obligated, under contract, to play their top stars meaning fans can get a chance to see their idols live without having to travel to Europe.

Matches tend to sell out and ticket prices are expensive. For Miami’s version of “El Clasico” for example, tickets range from $200 to $1400. This equates to over $15 million in ticketing revenue for a single match, without taking into account additional merchandising and food and beverage sales.

In fact, organizers also benefit from the sale of practice session tickets that range from $20 to $30 dollars the day before the match.

Considering that a regular season match for FC Barcelona or Real Madrid tends to generate on average anywhere between $5.6 to $6.2 million in ticketing revenue (Source: Deloitte Money League 2017) demonstrates that this summer tournament is a viable business model.

Evidently it is expensive to bring the top clubs to compete in the ICC, however, the growing appetite for European soccer in these markets has allowed for the organizers to get a return on their investment.

Broadcasting Revenue Continues to Grow

Income from television broadcasting deals has been increasing for the International Champions Cup in recent years. It is reported that the global TV revenue grew by 40% in 2015, and the demand is expected to continue to increment.

The fact that the tournament is held in the slow summer months in European football have allowed the ICC to establish itself as a valuable sports property with premium football content both in the US market and abroad.

The ICC currently holds over 65 TV agreements and the tournament is broadcast in over 170 countries and territories worldwide.

Global coverage is estimated to reach over 100 million cumulative TV viewers.

Sponsors are signing multi-year deals

Sponsorship revenue increased by over 60% from 2015 to 2016 and it is reported that the numbers continue to grow.

Heineken is the competition’s “presenting sponsor” and other multinational brands including Nike, McDonald’s, AON, Chevrolet, Mastercard and Samsung have signed on as premium sponsors with many of the one-year deals transitioning towards multi-year partnerships.

The full list of premium and official sponsors can be seen below.

Conclusion

As the International Champions Cup continues to mature it will undoubtedly become a more appealing sports property. Although it will most likely never rival the top European leagues and continental club competitions, it is certainly an attractive business model that caters to the ever-increasing fan base in emerging footballing markets such as the United States and China.

The entire event will be more than just a football match.There are numerous events planned around the game including VIP parties, autograph sessions and concerts. In fact, latin superstar Marc Anthony will perform at half-time in a concert that will resemble those of mega sporting events such as the Super Bowl. You can see full details here.